Original | Odaily Planet Daily

Author | Azuma

During the May 1st holiday, Mode Network, a Layer2 network built on OP Stack, announced that it will launch the governance token MODE on May 7th and will officially open the application for the first season's airdrop at 11:00 UTC on the same day (19:00 Beijing time). The application homepage (Claim.mode.network) is currently open, but specific airdrop allocation quotas are not yet visible.

Overview of Mode Network's Basic Information

In terms of positioning, Mode Network is a modular Layer2 network focusing on DeFi services. The network is built on OP Stack and has constructed the Layer3 network Mode Flare through the integration of Celestia's DA solution.

Unlike other Layer2 networks, the most significant feature of Mode Network is the built-in incentive mechanism for sharing protocol layer contract revenue, allowing Dapps and users to have the economic motivation to work together by sharing a portion of the sorter's profits.

According to L2BEAT data, Mode Network's current total value locked (TVL) is approximately 6.03 billion US dollars, ranking 10th among all Layer2 networks, with only a difference of around 200 million US dollars from more well-known Layer2 networks such as zkSync Era and Linea.

In terms of the ecosystem, Mode Network's official statement mentioned that the network has integrated hundreds of external applications, such as The Graph, LayerZero, Pyth, Etherfi, Renzo, Safe, and more. The network also has over 30 native applications, including Ionic, KIM, Ironclad, and others. As per its positioning, the applications on Mode Network are mainly focused on DeFi services.

In terms of network activity, by the end of the first season's airdrop, Mode Network had a total of 450,000 active addresses and approximately 20 million transactions.

MODE Token Economic Model

In terms of utility, MODE will play two roles on Mode Network: as a governance token to determine the network's future development direction and as an incentive medium to drive the network's ecosystem development.

The total supply of MODE is 10 billion, with an initial circulating supply of 1.3 billion, part of which comes from the first season's airdrop rewards, and part from the foundation and on-chain treasury. The allocation details of MODE are as follows:

• 35% of MODE will be used for user and developer airdrops, with 5.5% allocated for the first season's airdrop and 5% for the second season's airdrop, and the remaining tokens will be gradually distributed in future airdrop rounds;

• 19% of MODE will be allocated to investors, and these tokens will be locked for 12 months, followed by linear release over 24 months;

• 19% of MODE will be allocated to early contributors, and these tokens will also be locked for 12 months, followed by linear release over 24 months;

• 27% of MODE will belong to the foundation and on-chain treasury for ecosystem development incentives.

It is worth mentioning that Mode Network has explained the operation mechanism of the foundation and on-chain treasury. The foundation tokens are mainly responsible for funding support for ecological projects, while the use of on-chain treasury tokens requires resolution through community governance, and then they will be connected to major applications in the form of incentives. This also means that in the early stage of MODE TGE, of the 1.3 billion circulating supply, there may be less than 550 million tokens in absolute circulation (some airdrops will also be locked, as explained below).

Analysis of Airdrop Mechanism

Similar to many current projects, Mode Network also uses a scoring mechanism to measure community contributions. Users who have used the network and accumulated points through bridging assets and using various applications before May 5th (need to reach a certain undisclosed minimum threshold) have the opportunity to receive the project. However, Mode Network also mentioned that the snapshot will be taken before May 7th, and if users deposit funds before this date, their airdrop allocation may change.

In addition, to limit potential selling pressure from large holders, Mode Network will set airdrop lock-up limits for the top 2000 ranked addresses — 50% can be claimed at the start of the airdrop, and the remaining 50% can be claimed after 90 days. During this period, users must keep their assets on Mode Network, otherwise, they will be subject to proportional confiscation, and the confiscated tokens will flow to the second season's airdrop.

According to the airdrop rules, the application window for the first season's MODE airdrop will last for 30 days, and any unclaimed tokens will be distributed as future rewards to developers and users.

After the first season's activity ends, Mode Network will immediately launch the second season's airdrop activity. The second season's activity will run from May 5th to September 6th, distributing a total of 5% of the token allocation, and users from the first season's activity will receive a certain point acceleration in the second season's activity.

MODE Valuation Expectation

Although MODE has not yet undergone TGE, some pre-market trading platforms have already opened OTC trading for MODE, which may serve as a reference for data after the opening of MODE application tonight.

According to Whale Markets data, the current OTC trading price of MODE on the platform is $0.11, corresponding to an initial circulating market value (MC) of $143 million and a fully diluted valuation (FDV) of $1.1 billion.

Previously, due to the relatively clear valuation model of Layer2 itself, we can also estimate the price of MODE by weighting TVL and combining the MC and FDV status of existing Layer2 projects.

As shown in the above figure, after removing some extreme outliers, the estimated price range for MODE is roughly between $0.098 and $0.24, with a relatively concentrated distribution in the lower half of the range.

Of course, the above prices are only static estimates based on the competitive situation of Mode Network's current race track. Considering the differences in structural design, style emphasis, and circulation status among major Layer2 networks, the price performance of MODE still needs to wait until the opening for a definitive answer.

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